AMI CASE Case02 / Canada

Ontario Smart Meter Deployment Project

By smartgrider In Advanced Metering Infrastructure, Case study Posted 2014-07-13


Market structureA hybrid wholesale electricity market with significant amounts of centrally procured or regulated supply. Retail market created with no active participants. Smart meters are owned, installed and maintained by the Local Distribution Companies - LDCs
Number of retail customers4.8 million
Electricity consumed - 2011141.5 TWh
Peak Demand for Power -201124, 707 MW
Net Revenue to Distribution -2011$3.2 billion CDN
Distribution Network158,951 km of overhead lines
38,637 km of underground lines
674,966 km2 of rural area
6,714 km2 of urban area
80 LDCs - most are small municipally owned utilities, 72% of the province is served by 10 utilities, 25% is served by Hydro One
ContactUsman Syed / Ontario Ministry of Energy

CANADA Ontario

Ontario Smart Meter Deployment Project

In April 2004 Ontario announced the deployment of smart meters in all homes and small business by the end of 2010. In 2010, the energy regulator, Ontario Energy Board, set mandatory dates for the adoption of time of use prices for smart metered customers. As of December 2012, smart meter installation is complete with 4.8 million smart meters installed in the province and 4.5 million customers on time of use (TOU) rates. The TOU rates have 3 bands:

Prices are regulated by the Ontario Energy Board and set twice a year for the summer and winter periods. Each local distribution company in Ontario has deployed its own smart metering infrastructure and each is integrated with a central meter data management repository (MDM/R). The MDM/R is currently operated by the Independent Electricity System Operator (IESO) in its capacity as the “Smart Metering Entity”. The IESO developed the specifications and through a competitive bidding process awarded a contract to IBM Canada to build and operate the system. As a centralized system, the MDM/R serves to provide hourly billing quantity data for the distribution companies so they may use the data to bill their customers on TOU rates. The data that the MDM/R receives is completely anonymized, with only time-stamped consumption data.As a central database which stores valuable data from across the province, the MDM/R is strategically positioned to leverage the data for analysis at an aggregate level and to provide important evidence from which to base conservation and demand management programs off of, and to use in evaluation of those programs. In the future, this data may also be made accessible to companies who want to develop innovative smart grid technologies based off of real consumption data.

Objectives & Benefits

The smart meters project was designed as a step toward modernizing the electricity system with would yield the following benefits to the customer and the electricity system:

Smart meter benefits to the Electricity System

  • Facilitates conservation and demand management programs
  • Accurate meter reads (no more estimates)
  • Timely information to help manage consumption
  • Proactive customer service (e.g. immediate outage notification)

Smart meter benefits to the Electricity

  • Reduces the number of crew visits to read and service meters
  • Reduces tampering and theft of electricity
  • Provides significant operational benefits (better outage management and system control)

The smart metering infrastructure on its own provides significant near-term value to the utilities with the additional information it provides that helps drive operational efficiencies. However, it also provides a strong foundation for building additional value-add products and services on top of it such as home energy management systems and electric vehicle charging, and other technologies that would be components of smart homes.

Following the smart meter deployment, the TOU pricing was intended to leverage smart meter capabilities to enable peak-shifting and build customer understanding of how to control their consumption and how their consumption decisions affect the long-term cost of electricity supply. The intended benefits were:

TOU benefits to the Customer

  • Gives customers ability to move discretionary load to cheaper hours
  • Reduces long-term cost of electricity supply
  • Increases awareness of consumption

TOU benefits to the Electricity System

  • Environmental benefits as a result of load shifting
  • Savings in avoided/deferred capacity investments in new generation and transmission


Figure 1: Areas of responsibility for AMI communications and data processing

Planning for Success & Making the Business Case

Ontario’s smart meter implementation was the product of a coordinated approach between legislation, regulation and the development of guidelines and best practices. The Ontario Energy Board (OEB) as the distribution regulator provided the Energy Minister with a Smart Meter Implementation Plan in 2005, which was a product of working groups that included distribution regulator provided the Energy Minister with a Smart Meter Implementation Plan in 2005, which was a product of working groups that included distribution companies, consumer agencies, vendors, federal standards agencies and unions. The plan provided the estimated costs, key features of the technology and program, and the implementation timeline. Subsequently a benefit/cost review was conducted of the proposed program which calculated that the $1 billion CDN project would be worth $1.6 billion CDN once fully implemented.

With 80 LDCs in Ontario, that could have meant building and maintaining 80 data management systems for meter data. A series of Ministry-led consultations on managing the meter data led to the decision to build a single centralized MDM/R in order to reduce the cost to customers, and to provide access to aggregated consumption data across the provinces for future program planning and policy purposes. The MDM/R receives information from 5 different types of AMI systems operated by the distribution companies across the province, as such the MDM/R had to be built to be interoperable with the communications protocols of each of those systems. It also repackages that information into a common format with facilitates simpler analysis and downstream infrastructure related to billing and other enterprise systems. The MDM/R is now processing over 90 million reads per day, and is designed to process over 120 million meter reads per day ? which, on an annual basis, exceeds the number of debit card transactions processed in Canada and rivals the average payment transactions processed world-wide by VisaNet.

Ontario’s Privacy Commissioner worked with the Ministry and stakeholders to ensure that all smart grid initiatives would be designed to uphold the highest standards in data privacy and security. Working with distribution companies, the Privacy by Design principles were developed and incorporated into a guideline of best practices for smart grid companies to follow when designing their systems. The Privacy Commissioner’s office also helped to produce material that would explain to the public the measures taken to ensure the safety and security of smart grid.

The Energy Conservation Leadership Act (2006) and later the Green Energy and Green Economy Act (2009) housed the smart meter initiative within broader plans to build an economy around clean energy and promote conservation. Home energy management systems have been piloted in several distribution territories to develop technologies and programs that encourage customer empowerment and result in load shifting. The impact and of these programs and technologies have will be attributed in part to the smart meter initiative.

Current Status & Results

As of December 2012, smart meters and AMI have been deployed for all residential and commercial customers in Ontario, with TOU adopted by 94% of customers across the province. The project’s total cost for installation came in at the estimated $1 billion CDN. At this stage it is too early to measure the overall progress on some of the project objectives, with many customers having been included in TOU for less than 1 year. Consumption data is being collected by the OEB for the whole province in order to evaluate the impact of this project once a significant period of time has passed.

In the absence of an aggregate study, some progress has been evaluated in territories that have implemented TOU over a longer period. For example the Newmarket distribution company commissioned a study by Navigant Consulting, published in 2010, to determine if load shifting behaviours could be observed from their customers as a result of TOU pricing. Importantly, they found that during an analysis period of over 800 days that spanned before TOU and after TOU customers shifted approximately 3% of their consumption from peak to off-peak periods.

Project Details

  • Smart Meters and Advanced Meter Infrastructure
    ○ 4.8 million smart meters deployed
    ○ 5 different meters installed across the province
    ○ All communications infrastructure in place
  • Time of Use Pricing:  4.5 million customers, fully implemented by 2012
  • Meter Data Management Repository: 4.5 million meters enrolled (Dec 2012)
  • Project Cost: $1 billion CDN for AMI installation
  • Project Cost Recovery: ~$3-4 CDN /customer/ month through customer rates(declining over time as principle is paid down)
  • Project Benefit : $1.6 billion CDN

Lessons Learned & Best Practices

Project management

As part of maintaining a momentum and making the project implementation transparent and accountable, the OEB required the distribution companies to report every month on their progress of smart meter installation and TOU implementation. The OEB also required the smart metering entity to report on their enrolment of LDC AMI systems into the MDM/R. These reports were used to track the overall progress and were posted online.

Customer Engagement

The government wanted to centralize the communication as much as possible to make it easier for distribution companies to communicate the changes to customers and to help set their expectations for future smart grid initiatives. It created a TOU Rollout working group which developed various customer engagement materials including brochures, bus ads, posters, bill boards etc. All distribution companies were offered these templates for materials which they could brand, and print themselves. The smaller distribution companies, with smaller public engagement budgets, made the most use of these materials. Others commissioned their own materials, and used other methods including hosting town halls, writing articles about it in local newspapers, and engaging customers at community events. Ontario was one of the earliest jurisdictions to deploy smart meters and in comparison to others in North America it has experienced relatively little opposition.

Despite this early success, there is still a fair amount of engagement required help customers fully appreciate how they can leverage their smart meter’s capabilities. As smart meters were deployed along with the implementation of TOU pricing, many customers saw smart meters as tied to TOU and not part of a greater smart grid value proposition. In order to communicate the greater vision for smart grid in Ontario, programs for developing home energy management systems and demand management programs relate back to the smart metering infrastructure that they are building off of. At a policy level, the government has identified “increased customer control of their own energy use” as one of the 3 smart grid objectives. These 3 objectives have helped government, politicians and distribution companies communicate to customers the benefit of smart grid.

Building Smart Grid Policy

Much of the ongoing thinking for smart grid initiatives in the province is captured in the annual reports of Ontario’s Smart Grid Forum. This forum is an independent body, administered by the IESO, which draws together stakeholders from the government, regulator, distribution companies and corporate partners looking to develop new technologies and services for smart grid. In addition to the formal consultative processes, the regular meetings of the Smart Grid Forum have served as a valuable sounding board for government smart grid policy ideas.

Privacy by Design

Ontario’s Privacy Commissioner not only helped to create a robust set of guidelines for managing smart data, once she was satisfied that the program was meeting all of the necessary standards, she became a champion for Privacy by Design (PbD) in smart grid. Working with smart grid stakeholders around the world, she helps industries to incorporate the PbD principles into smart grid planning, and to communicate the integrity of smart grid to customers. Unanimously passed and adopted as an International Framework for protecting privacy at the International Conference of Privacy Commissioners in 2010, PbD has become a best practice around the world.PbD continues to publish on emerging issues for smart grid and “big data.”

Time of Use Pricing

When customers were fist exposed to TOU pricing, the OEB originally set the TOU schedule so that the off-peak period began at 10pm based, on when the demand profile for electricity drops off significantly across the province. The public reaction to this was negative, with many complaints of the impracticality of waiting to run laundry machines (for example) after 10pm. The government and the OEB responded by adjusting the schedule so that off-peak prices applied at 9pm, and then in light of an on-going recession they were adjusted to 7pm ~ 7am. Mid-peak prices were adjusted to be from 7am ~ 11am and 5pm-7pm, on-peak prices run from 11am ~ 5pm.

Procurement Lessons

The OEB, representing the interests of rate payers, implemented the government’s Smart Meters: Discretionary Metering Activity and Procurement Principles regulation in 2008. This regulation stipulated a minimum functionality for meters, including their ability to charge TOU rates. To ensure that all investments in smart meters were prudent, the OEB ruled that if distribution companies wanted to invest above and beyond the minimum requirement, those additional functions would have to be defended with a business case that would demonstrate the added value for the customer. While this has proven a cost effective measure for customers, few distribution companies have chosen to invest in meters with additional technology capabilities that have emerged to serve future smart grid technologies such as home area networks. This decision will continue to be evaluated into the future as more technologies and systems interact with the meters. However, each meter can be upgraded or outfitted with additional technologies so the question of future adaptability is not a technical concern.

Distribution companies also had to be authorized by law before they could procure. This encouraged buying-groups to form that could take advantage of economies of scale. Despite that, the service territories of the various distribution companies across the province ranged from dense urban centres to rural and remote communities. This dictated a variety of technical capabilities, where some distributors procured meters to operate on a mesh-network for urban areas, while others procured meters to operate on tower-based communication system. The result is 5 different AMI systems (Trilliant, Elster, Sensus, Silver Springs, Tantalus). This proved an effective price measure as the average installed price for the AMI averaged around $250 per customer. Technically it required additional programming to repackage the data into the same format for the MDM/R to process and store.

Next Steps

Ontario’s decision to create a central MDM/R for all smart meter data across the province offers a wealth of opportunity for data analysis linking a rich data set of energy demand profiles with other public data sets. The analysis can lead to important insight with which to inform policy and provide feedback on the effects of current programs and regulation. The data also provides a valuable resource for entrepreneurs to create innovative projects and services for customers. To enable this innovation, Ontario is conducting a Green Button pilot to determine best practices for granting customers and third parties safe access to customer data.

Key Regulations, Legislation & Guidelines

Smart Meter Implementation Plan (2005)

Functional Specification for Advanced Metering Infrastructure (2007)

Ontario Green Energy and Green Economy Act (2009)

Smart Privacy for the Smart Grid: Embedding Privacy into the Design of Electricity Conservation (2009)

Ontario Green Button pilot

Ontario’s Smart Grid Policy

Smart grid policy is set provincially in Canada. Ontario’s policy environment for smart grid is the most defined in Canada. Ontario’s large power consumers are connected with interval meters and billed according to the Hourly Ontario Energy Price which tracks market prices. With the deployment of smart meters and time-of-use pricing for residential and commercial customers virtually all of Ontario’s electricity customers are now paying prices that reflect market demand. This has unlocked potentials for new business models and system innovations in the province. Under the Green Energy and Green Economy Act of 2009, Ontario’s Minister of Energy directed the Ontario Energy Board to promote the implementation of smart grid capabilities. The directive also required that the regulator guide the development of mandatory Smart Grid Plans for distribution utilities, and that those plans be regionally coordinated. Ontario smart grid policy objectives are captured under the 3 focus areas: customer control, power system flexibility, and adaptive infrastructure. These policies coupled with feed-in tariffs for renewable energy, aggressive conservation targets, as well as the Smart Grid Fund, have attracted entrepreneurs, businesses, utilities and venture capitalists to invest in Ontario.

※ This case was written with contributions from the Ontario Ministry of Energy, images were taken from the Ontario Energy Board and Independent Electricity System Operator.

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